Australia – ASIC Sustainability Reporting Obligations Update

The Australian Securities and Investments Commission (ASIC) has issued further clarification on sustainability reporting obligations for large Australian companies. These requirements introduce mandatory annual sustainability reporting alongside existing financial reporting obligations.

As part of Australia’s evolving ESG regulatory framework, in‑scope entities must prepare sustainability reports addressing climate‑related risks, governance arrangements, and forward‑looking disclosures. Both the sustainability report and the accompanying auditor’s report must be lodged directly with ASIC, creating a new standalone obligation within the annual reporting cycle.

Entities are encouraged to review the latest guidance to ensure readiness, identify potential compliance gaps, and coordinate across finance, legal, and sustainability functions to meet ASIC’s lodgement requirements within the prescribed timeframes.

Applicability and Scope

An entity is required to prepare a sustainability report if it:

• Is required to prepare an annual financial report under Chapter 2M of the Corporations Act; and
• Meets one or more of the sustainability reporting thresholds set out in Section 292A of the Corporations Act.

Phased Implementation Timeline

Sustainability reporting obligations will apply on a phased basis as follows:

Lodgement Deadlines

Reporting entities must lodge both the sustainability report and the accompanying auditor’s report with ASIC within the following timeframes:

• Within three months after the end of the financial year for disclosing entities, registered schemes, and registrable superannuation entities (RSEs)
• Within four months after the end of the financial year for all other reporting entities

Statutory lodgement timeframes are set out in Sections 319(3) and 1232(1) of the Corporations Act.

Key lodgement dates include:

Lodgement Process and Requirements

The sustainability report and auditor’s report must generally be lodged directly with ASIC. The following requirements apply:

• Form 398 (Copy of Sustainability Report and Auditor’s Report) must be completed prior to lodgement
• Both reports must be lodged online via the company officeholder, registered agent, or auditor portals (one‑time portal registration required)
• The annual financial report, directors’ report, and auditor’s report for the same reporting period must be lodged concurrently using Form 388 (Copy of Financial Statements and Reports)

Required Actions

Entities should:

• Assess whether the sustainability reporting obligation applies to them
• Prepare sustainability reports in line with ASIC guidance and applicable standards
• Ensure internal coordination to meet reporting, assurance, and lodgement timelines

Risks of Non-Compliance

While no specific standalone penalties for sustainability reporting failures have been explicitly prescribed, ASIC has confirmed that it will actively review lodged sustainability reports. Entities that fail to meet their obligations may be subject to enforcement action, penalties, and other regulatory consequences.

How Mercator® by Citco (Mercator) Can Help

Mercator can assist with managing the sustainability reporting lodgement process, including preparation and filing of Form 398 (Copy of Sustainability Report and Auditor’s Report), ensuring submissions are completed accurately and on time. For assistance, please contact mercator@citco.com.